The RBA made the decision to keep rates on hold for the ninth consecutive time this year, providing a sigh of relief for nervous mortgage holders. But the decision did little to mitigate consumer uncertainty, as we’re still left with looming economic volatility. Last week I told you about Louie, the Sydney CBD fruit vendor who is seeing the spending behaviour that we read about in the news at the most basic, shop front level. Louie, who used to count change for high flying bankers flashing fifty dollar bills to pay for an apple, is now seeing his five cent jar overflowing. Louie’s goods are being paid for in loose change, a sign he believes is proof that in the current climate, just about everyone is doing it tough.
It’s no secret that people are saving, but this week I wanted to provide some food for thought with regards to unnecessary spending, specifically around superannuation. The average Australian currently has three super accounts, and every one of those accounts come with fees for advice that you might not even know about. What’s worse is that if you’re like most Australians, you’re being charged for advice that you’re not even receiving.
Jump on the Internet and take a look at your accounts, the amount you’re paying and what you’re paying for. If you think you might have some unclaimed accounts, visit the ATO website and use the Super Seeker tool. Most people don’t have a clear picture of exactly where their super is, never mind how much they are being charged – so make sure you do. The difference can be hundreds or thousands of dollars per year, depending on how much super you have.
Take a close look at your fees. There are some you can’t avoid, such as member fees which are associated with maintaining you as a separate fund member, and administrative fees which reflect the costs of the support and service provided to you by the fund. There are also transaction fees – most super funds will allow you to conduct a certain number of transactions for free, and charge you thereafter. But then there is the adviser fee. If you have a look on your latest super statement and see the name of an adviser but have never heard from that person, it’s time to get on the phone to your fund. If you’re paying for advice, you should be receiving it, and because most people don’t realise they are being charged for advice, they don’t ask for it. And if you have more than one super account, you’re paying fees on top of fees unnecessarily.
In times of uncertainty, advice is well and truly invaluable, so make sure you’re getting what you’re paying for. If you’re not, it’s time to start asking some questions and talking to a professional who can help.
